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Inside the Psyche of a Negotiator – Seeing the Forest for the Trees

What is the Psychology of an effective negotiator? How does our cognition impact the success of negotiation? And crucially, if negotiation magnifies human interaction, how does the nature of both parties’ internal state impact this dynamic?

Negotiation situations are and always have been a fundamental part of our society. From Pzeizer’s attempt to take over AstraZeneca, to an attempt at peaceful conflict resolution in the Ukraine, to you or I asking for a pay rise at the next performance review – negotiations have implications for individuals, institutions and our global society.

Negotiations are rarely clear-cut and straightforward. Instead, negotiators have the difficult task of making sense out of a ‘fuzzy’ and ambiguous situation. This is often caused by a lack of information about the real interests of the opponent (De Dreu et al, 2007).

In an ideal world, two opposing parties would work towards ‘integrative agreements’. This may entail a collaborative and innovative solution which is more valuable to both parties than a simple 50-50 split (De Dreu et al, 2007). Due to a number of elements, frequently due to human factors, negotiations tend towards avoidant and contentious strategies – creating an adversarial environment. This piece takes an explorative Psychological and Neuroscience perspective, giving a brief snapshot of some of these factors.

Limited Bandwidth – according to the Limited Resource Theory (Baumeister, Muraven & Tice, 2000), effortful processing leads to an ‘ego depletion’ state. In this state, we are unable to commit sufficient processing power to be able to take the perspectives of others and engage in collaborative behaviours (Fennis, 2011). Some would therefore argue that having a definitive outcome which we rigidly pursue during negotiation can lead to unhelpful behaviours via ego depletion. Instead, adopting a more open, non-attachment mindset could allow one party to attentively listen to what the other is trying to say about their position and underlying motivation.

Ego Threat – When our status is challenged, research has found that we experience decreased IQ, increased responses in the amygdala (associated with emotionality) and decreased responses in the Pre-Frontal Cortex (crucial for cognitive control). Crucially, a reduction in status can generate a strong threat response, as research shows that the same area of the brain responsible for physical pain is activated when this occurs (Eisenberger, Lieberman, & Williams, 2003). So, when we feel that someone is challenging an idea or stance we identify with, we will take up an ego-defensive position in order to protect our status. This typically leads to competitive behaviour, negative views of the opponent and extreme attitudes (De Dreu and Van Knippenberg, 2005).

Empathetic Awareness – The key to reaching ‘integrative agreements’ is looking beyond the other parties’ position/ stance and understanding their interests and motivations. Where we are limited is our faulty assumption that others see the world exactly as we do. And therefore want the same things as us. This assumption manifests via the ‘fixed-pie’ assumption (Thompson& Hastie, 1990), which leads us to assume that there are limited resources. We therefore engage in a zero-sum mindset – placing us in a directly opposed position to those we are negotiating with, instead of adopting a win-win mindset.

Unconscious Heuristics – In order to efficiently process our world, humans have developed an incredible ability to make decisions very quickly based on our past experiences. However, frequently, this can lead us to misinformed decisions, as we base these decisions on ‘heuristics’ or general rules of thumb (Kahneman & Tversky, 1973). Kahneman & Tversky outlined a number of these heuristics but the two below are particularly crucial in negotiations:

– ‘Anchoring’; the tendency to rely on an arbitrarily chosen point of reference. Negotiators often anchor onto their counterpart’s opening offer and allow counter-offers to be dictated by this.

– ‘Availability Heuristic’; the tendency to rely on information which is most easily accessible to us through our memory. Here, we must possess the motivation to go beyond the immediately available information, to make more informed decisions.

Discovering Fairness – we are hardwired to seek fairness. However, the way in which we judge fairness differs between parties as what others value, drives their positions and stances. This has crucial implications for settling agreements, as fairness can detract from the creation of value by focussing attention on the equal sharing of resources (De Dreu, et al, 2007). So, a well intentioned negotiator may actually be proposing a completely unfair offer, if they don’t fully understand their opponent. This has been shown to lead to a strong threat response, activating areas in the brain which are involved in emotions such as disgust (Tabibnia & Lieberman, 2007).

So what has this journey through the negotiator’s Psyche told us?

To be a value creating negotiator, one has to be able to pierce through the rhetoric of an opponent’s position, to understand their underlying interests and motivation. This requires an ability to ’see the forest for the wood’ or take a step back and detach from your personal position, be empathetic, keep your ego in check, do your research and understand what ‘fair’ looks like for both parties. Sounds like a walk in the park doesn’t it (!) or better yet walk in the forest…